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Energy Transition Could Doom Africa’s Oil Producers

Production

When it comes to the final frontier for big oil discoveries, it’s not the Guyana-Suriname basin where supergiants like ExxonMobil (NYSE:XOM), Hess Corp. (NYSE:HES), and CNOOC (NYSE:CNOOC) have already staked their claims. And it’s not the American shale patch, where production has hit reverse gear with no end in sight. It’s Africa, where even small-cap companies are staking outsized claims of the kind that generously reward investors with a bigger risk appetite.

Unfortunately, the second-largest continent is suddenly finding itself between a rock and a hard place, thanks to Covid-19 and OPEC’s production cuts. Five of OPEC’s 13 member states are from Africa, with the huge cuts taking a massive hit on their oil-dependent economies.

Yet, things could get far worse for Africa’s oil and gas giants.

new report by risk consultancy firm Verisk Maplecroft via CNBC has revealed that Algeria, Chad, Iraq, and Nigeria are at the highest risk to experience political instability as the world turns its back on oil and gas in favor of renewable energy.

Flatlining oil sectors

About two decades ago, The Economist [infamously] dubbed Africa as the “Hopeless Continent”, claiming that the new millennium had brought more disaster than hope to Africa with threats of famine in Ethiopia (again), floods in Mozambique, mass murder in Uganda, and the implosion of Sierra Leone.

A decade later, the magazine did a 180-degree and changed its tune to “Africa Rising” thanks to major improvements in labor productivity, dropping inflation, and booming economies. 

But alas, the upbeat narrative was not to last for long, with the 2014 oil price crash devastating some of the continent’s most promising economies.

And now, it’s happening all over again, with some of the continent’s leading oil producers in dire straits after the 2020 oil price crash.

To wit, Angola has gone from being Africa’s top crude producer just five years ago to barely pumping more than war-torn Libya. Nigeria–another key OPEC member–is in grave danger of suffering Angola’s fate as OPEC tries to balance the markets by restricting oil production.

Angola’s oil production has plummeted to a 15-year low of below 1.2 million barrels a day since November, effectively meaning that Libya, where a decade-long civil war has massively disrupted the country’s oil industry, is now pumping more crude than Angola.

But Angola’s problems have been long in the making, with the seeds of this sharp decline sown during the 2014 oil price crash, as the oil majors curtailed capex spending after oil prices crashed from $100 a barrel to less than $30 in the space of a few years.

Although the deep production cuts by OPEC eventually spurred a rebound in prices, offshore drilling activity by Angola and West Africa have recovered far more slowly. The coronavirus pandemic has triggered yet another round of deep spending cuts, with Baker Hughes reporting that just a single drillship was operating in the waters off Angola and Nigeria by the middle of 2020.

Some subsequent offshore projects by Total SE (NYSE:TOT) and Eni SpA have helped keep offshore oil flowing in Angola; however, the global pandemic and subsequent market downturn have ensured that just a trickle is flowing from Angola’s deepwater projects.

Angola has recorded a sharp 40% decline in production over the past decade, reflecting years of underinvestment in new projects despite the IMF estimating that it needs oil price of just $55/barrel for fiscal breakeven. Angola’s oil industry is largely dependent on deepwater fields where production typically declines faster than in onshore oilfields. The situation has been aggravated by a prolonged lack of constant investments to improve oil-recovery rates or tap additional reservoirs.

The situation is not much better in Africa’s top oil exporter and largest economy, Nigeria.

Nigeria only recently emerged from a major recession in 2017 and was contending with low growth of about 2% before the oil crisis struck. Oil sales contribute 90% of the country’s foreign exchange earnings, 60% of the revenue, and 9% of GDP. With a high fiscal breakeven of $144 per barrel, Nigeria is feeling the heat more than many of its OPEC peers. The country had applied for $7 billion in emergency funds to the African Development Bank, World Bank, and the IMF but saw its credit rating downgraded by Fitch and S&P due to the oil slump.

Nigeria cut production sharply last year as part of the OPEC+ deal, with crude shipments falling to 1.5 million barrels a day, the lowest level in four years. That’s less than half of the nation’s long-standing target for 2023, which might remain out of reach without quickly ramping up deepwater drilling.

Big Oil companies, including Total SERoyal Dutch Shell Plc. (NYSE:RDS.A), and Exxon Mobil have expressed concern that Nigeria’s long-delayed Petroleum Industry Bill (PIB) could deter investment. Nigeria’s National Assembly is set to debate the proposed PIB in the first quarter of 2021—which could lead to major changes in the roadmap of the oil and gas industry after nearly two decades of attempted reform.

Oil prices have mostly recovered from the historic slump, with Brent crude rising above $65 a barrel in London. Nigeria, though, remains in a better position to recover from the investment slump than Angola, considering that about two-thirds of the country’s production comes from shallow-water and onshore fields.

The final nail

Whereas Africa’s oil and gas producers continue to hope that the ongoing rollout of Covid-19 vaccines will return global oil demand to some form of normalcy sooner than later, the long-term outlook remains dire, thanks to a more formidable foe: The renewable energy megatrend.

Maplecroft has warned that countries that fail to diversify their economies away from fossil fuel exports face a “slow-motion wave of political instability.’’

The consultancy says the move away from fossil fuels is set to hit high gear over the next 3-20 years, and that oil-dependent countries that fail to adapt risk facing sharp changes in credit risk, policy, and regulation.

The firm has suggested that the worst-hit countries ‘‘could enter doom loops of shrinking hydrocarbon revenues, political turmoil, and failed attempts to revive flatlining non-oil sectors.”

The report suggests that Africa’s oil and gas powerhouses ought to borrow a leaf from their Middle East peers, with Saudi Arabia choosing to forego the natural gas bridge and instead directly pivoting towards green hydrogen.

OilPrice.com



40 Comments on "Energy Transition Could Doom Africa’s Oil Producers"

  1. Cloggie on Wed, 28th Apr 2021 8:58 am 

    Completely wrong conclusion. The renewable energy transition plays Africa in its cards, as they have the best solar conditions and plenty of cheap labor. Africa could provide a large chunk of the required hydrogen to world markets and finally touch serious money. Nobody will miss African oil.

  2. DT on Wed, 28th Apr 2021 9:57 am 

    The worst part is the lie talking about “renewable energy” being a thing. There is no such thing. The only truly “renewable” is entropy. Entropy is everywhere in everything and is constantly renewing its self in a never ending cycle. Rust never sleeps.

  3. EverythingIsDestroyedNow on Wed, 28th Apr 2021 10:11 am 

    They have now destroyed YouTube and other video hosting web site by taking control of them and making videos mocking videos creator. They are also mocking car companies like RAM pickups trucks and so on. They are doing to same thing to main porn site like xhamster and pornhub.

    I think you have gone to far now. People will go their own way and refuse to participate to anything that resemble civilization. The ones that will suffer the most are the elites, followd by loser with no skill and personal qualites.

  4. EverythingIsDestroyedNow on Wed, 28th Apr 2021 10:16 am 

    Up to a certain point, you could say that entropy is killing civilization like rust is killing anything that is metal. It is really over now. The extinction of the human race is what coming next.

    You won’t build anything new without the voluntary participation of people. I don’t think you will get people to voluntary work with you. Everyone is on is own now.

  5. EverythingIsDestroyedNow on Wed, 28th Apr 2021 10:30 am 

    You are the typical politicians that act as coward, because that all you know. You are mocking people on YouTube and porn site. If you were real leaders, you would have talk to people or shut down YouTube and porn site. You are just the typical pieces of shit loser politicians with no courage, no imagination no vision for the futur.

    If you had courage you will have told people about peak oil and start rationing oil right away.

    If there is indeed aliens. all you had to do is killed them or killed people at the top of the power structure.

    This is shit is unfixable.

  6. EverythingIsDestroyedNow on Wed, 28th Apr 2021 10:37 am 

    It is amazing the amount of money you spend to mock people all over the web. Making a 8 min video to mock people is one thing, making a 30 mins video to mock people is another. Nobody will watch a 30 min video about someone fixing a transmission, Not only you waste money, you wasted your time on a strategy ( 30 min video) that has no real return.

    You did to me what you did to them, you violate their privacy by accessing their account on YouTube and porn site. You violated people private the same way you violate my private by spying on me. You destroy everything.

  7. EverythingIsDestroyedNow on Wed, 28th Apr 2021 12:18 pm 

    You solution this is now to force a conservative agenda down to people throat instead of a liberal agenda. This is great plan of action to fix this mess. Wow everything for you is about politics and money. Let’s me guess, this is the new illuminatis agenda now.

    You are not going to find any leader to take over the shit show that you have created yourself. Wise people will isolate them self from this chaos.

  8. EverythingIsDestroyedNow on Wed, 28th Apr 2021 12:31 pm 

    StarvingLion » Wed 28 Apr 2021, 04:18:20

    BANKRUPT UK: “Duh”.

    “The Treasury cannot explain how it will manage declines in tax revenues worth £37 billion from fossil fuels as the UK shifts to a clean economy, MPs have warned.”
    ————————————-

    the UK shifts to a clean economy, MPs have warned.”

    This is the most important here. Notice they always talk in vague terms like above but they never to into detail. They left the implementation of their shit policies to people like me. Maybe people like me will refuse to participate and insolate themself away from this shit show. They always leave the tough part of to somebody else. So fucking typical of shit politicians and elites.

  9. EverythingIsDestroyedNow on Wed, 28th Apr 2021 12:45 pm 

    I remember when I was a young engineer, by the way if you are young don’t be stupid in go into STEM field, I was once told by my boss,well I don’t know how to do it, but you are an engineer so figure this yourself, this is why we pay you.

    Seem it so many time from the so called elites and highly intellectual people that speak long sentence with a lots of words that means nothing. The elites is there living a life of with free mental anxiety while the rest of you are stuck with mental anxiety and body aches.

  10. Cloggie on Wed, 28th Apr 2021 12:54 pm 

    #1 Dutch hydrogen guru, prof. van Wijk:

    http://profadvanwijk.com/wp-content/uploads/2019/09/Hydrogen-the-bridge-between-Africa-and-Europe-5-9-2019.pdf

    “Hydrogen – The Bridge between Africa and Europe”

    https://www.pv-magazine.com/2021/03/30/what-will-african-nations-require-to-produce-competitive-green-hydrogen-exports/

    “What will African nations require to produce competitive green hydrogen exports?”

    https://www.miningweekly.com/article/africa-hosts-considerable-potential-for-green-hydrogen-2021-03-25

    “Africa hosts considerable potential for green hydrogen”

  11. EverythingIsDestroyedNow on Wed, 28th Apr 2021 12:58 pm 

    I look into this how to fix this. You either start by top of the power pyramid of the bottom of the pyramid.

    https://www.bibliotecapleyades.net/imagenes_sociopol/esp_so1x.jpg

    For example, let’s say you start by the bottom of the pyramid and you go into a massive killing program among big corporations.

    Lets say you have 20 VP, 2 president, 20 board member. This is about 42 people to kill per big corporation. This could be done really fast and bring down the chain of command from the top to the bottom, making the people at top of the pyramid without any real power. You could also kill people at the top of the pyramid.

  12. EverythingIsDestroyedNow on Wed, 28th Apr 2021 1:06 pm 

    I am against hijacking the personal account of people on YouTube and social media. I am for hijacking the social media account of big corporation. This cound be another way to kill the power the have over civilization. Basically you make fun of big corporation on Youtube. This I can get behind.

    https://www.youtube.com/watch?v=4dLpTC8Nlbc

    This is a good example of how to destroy big corporation and media industries.

  13. EverythingIsDestroyedNow on Wed, 28th Apr 2021 1:25 pm 

    I love how they make fun of Dodge corporation. How he explain how to TRX was design by kindergarten kids. First 2 min of the video. Video is too long. 10 mins top it should be

    https://www.youtube.com/watch?v=di3KFAmSIN0

  14. EverythingIsDestroyedNow on Wed, 28th Apr 2021 2:47 pm 

    StarvingLion » Wed 28 Apr 2021, 15:29:57
    New ATMs in Virginia with (vaccine) ID scan and (microchip) palm scan

    https://youtu.be/Hc__j8TXKo0
    ——————————–

    I am not sure if this is true of not, I don’t trust anything on the web, but if it is true, expect people to revolt and bring down the whole electrical grid.

  15. YouMightToMakeYouKnowWhatYouAreDoingHere on Wed, 28th Apr 2021 3:00 pm 

    You have what we called an inverted Whites population pyramid. A lot of old Whites man at the top of the pyramid and a lot of brown shit diversity at the bottom of the pyramid.

    The Whites people at the top of the pyramid are the ones that have build this civilization, they are the ones that will shut it down permanently.

    A guy of 50 year old still has plenty of energy left to shut this flimsily electrical grid in an efficient manner and forever.

    You might want to think about that before doing something stupid, I am talkin to the elites/Illuminatis here.

  16. YouAreTotallyFucked on Wed, 28th Apr 2021 3:28 pm 

    Armageddon » Wed 28 Apr 2021, 15:51:28
    China is buying its oil with Cryptos from Iran and others and those countries are turning around and buying their goods from China using those Cryptos, completely bypassing the US dollar and the Swift system.

    ——————————————–

    If this is true, it means that Iran and China went back to bartering as an economical system. Wow this worldwide economical system went from a currency based economical system to bartering economical system.

  17. YouAreTotallyFucked on Wed, 28th Apr 2021 3:49 pm 

    Armageddon » Wed 28 Apr 2021, 15:51:28
    China is buying its oil with Cryptos from Iran and others and those countries are turning around and buying their goods from China using those Cryptos, completely bypassing the US dollar and the Swift system.

    ——————————————–

    If this is true, it means that Iran and China went back to bartering as an economical system. Wow this worldwide economical system went from a currency based economical system to bartering economical system.

    Just want to add this, in a bartering economical trade system, people negotiate the amount of goods exchanged. I guess now the price of goods bartered is now partially decided by the value of crypto currency

  18. YouAreReallyFuckedDontYou on Wed, 28th Apr 2021 4:07 pm 

    I thought crypto currency was invented by the Illuminati/Bad reptilians to buy and sell adrenochrome, child trafficking and pedophilia. I don’t think crypto was design to do international trade.

    https://www.bibliotecapleyades.net/imagenes_sociopol/esp_so1x.jpg

  19. makati1 on Wed, 28th Apr 2021 4:43 pm 

    Oil, NG and coal are going to be around for decades or more. Nuclear is growing. “Renewables” will struggle to gain use and are mostly replacing electricity, not the fuels that power the world. Think trucks, mining equipment, construction equipment, ships, etc., not cars. How many wind mills does it take to build a freighter that crosses the ocean with your new TV? LOL

    Lots of guesses, mostly by those who’s career and/or are financially involved, pushing their investment. I have no investments so I can view the world with open eyes. It isn’t a pretty sight these days. Pass the popcorn.

  20. TheTruthIsComingOut on Wed, 28th Apr 2021 6:53 pm 

    I knew that the elites/Illuminati were behind mass migration in Whites nation. So finally I get to know why Western Europe and England are doing. It is a soft to take over Canada, US, Australian and NZ. From the link below, to “undermine” or “weaken” their national, it is a soft coup d’État against US,Canada,Australia.

    It is way for Western Europe and England to access the natural resource, skilled people of other nations. It is basically an act of war. It is like declaring war on Canada,US, Australia. Notice is a member of the Bilderberg group that is is mainly made of Europeans leaders. (66%)

    https://fr.wikipedia.org/wiki/Peter_Sutherland

    In his function as special envoy of the United Nations, Peter Sutherland proposed to the States of the European Union to “undermine” or “weaken” their national homogeneity because the future prosperity of States will depend, according to him, on their international openness8.

  21. YouFailedMotherFuckersIWillAlsoRemberThisCoupDetatAgainsCanada on Wed, 28th Apr 2021 7:16 pm 

    I was too lazy to investigate the trilateral commission. Lets look at it, shall we.

    Here are the headquarters of the Trilateral commiosson: Tokyo (Asia Pacific Group), Paris (European Group), Washington, D.C. (North American Group)

    The Trilateral Commission is a non-governmental, nonpartisan discussion group founded by David Rockefeller in July 1973 to foster closer cooperation between Japan, Western Europe and North America.Wikipedia

    Notice the Rockefeller name. Where do we see this name again, in the graph below

    https://www.bibliotecapleyades.net/imagenes_sociopol/esp_so1x.jpg

    https://en.wikipedia.org/wiki/Trilateral_Commission

    You remember this news not long ago,Shinzo Abe resigns as Japanese prime minister. He was executed by the US for a attempted soft coup d’État against US.

    https://www.youtube.com/watch?v=LHylxZJSBAg

  22. IWillAlsoRemberThisCoupDetatAgainsCanada on Wed, 28th Apr 2021 7:24 pm 

    I bet if you dig long enough, you will see that Israel, China, England and Western Europe worked together in this soft coup d’État against Canada, US, Australia and NZ

    China: Beijing slams US for attempts to “politicise” COVID origin-tracing efforts

    https://www.youtube.com/watch?v=vAQvfKCvT2U

  23. IWillAlsoRemberThisCoupDetatAgainsCanada on Wed, 28th Apr 2021 7:36 pm 

    You see this news there:

    Moscow accuses US, NATO nations of turning Ukraine into ‘powder keg’| Russia-Ukraine Conflict | WION

    https://www.youtube.com/watch?v=-Hf2Xe_hHoQ

    I will give you my personal analysis of this. I thought at begining it could be the US, but US has some many provblems right now, I don’t see the benefit for them to do this.

    Maybe is actually another soft coup d’État from Israel, China, England and Western Europe againt Russian to acces their natural ressouces and skilled people. A soft coup d’État make much more sense now.

    Now we are going somewhere and things are starting to make sense now.

  24. IWillAlsoRemberThisCoupDetatAgainsCanada on Wed, 28th Apr 2021 7:43 pm 

    I hate these fucking games of power. What I like is my little projects like electronics, sewing, fixing my car here and there. But if you attack US and Mexico, it is a direct attack on Canada and my survival. My survival is dependent on the good functioning of these nations. I can also play these fucking power games, if I have no choice.

  25. ComeFreemasonShowUsYourSKill on Wed, 28th Apr 2021 8:09 pm 

    Everyone look like a fucking reptilians on YouTube.

    https://www.youtube.com/watch?v=1upv9Xq1Q-Y

    There is so much chaos out there. It wont last long before the supply chain goes down. I don’t know what to think anymore.

    Canada on alert as Russia military moves into Arctic

    https://www.youtube.com/watch?v=Sz3iGGiQquo

    Lets see if the Freemason can build a new civilization out of chaos. They are proud user of the chaos strategy. Lets go Freemason bring order now into this world now. I am watching your great leadership skills.

  26. SoManyReptilainsEverywhere on Wed, 28th Apr 2021 8:16 pm 

    There are so many reptilians everywhere. Today during my prostate medicine, I have to go trough so many porn video before I could find a video with real human in it. So many reptilians in the porn industry, it is worst then Hollywierd and the music industry.

    Do Whites people still exist

  27. SoManyReptilainsEverywhere on Wed, 28th Apr 2021 8:47 pm 

    Everyone look like a reptilian, including the gook. Look at the teeth.

    https://www.youtube.com/watch?v=OQj-H5lzyXk

  28. SoManyReptilainsEverywhere on Wed, 28th Apr 2021 9:06 pm 

    More reptilian crap, show the finger real well 2:27

    https://www.youtube.com/watch?v=6m50N5bc_BE

    show the thumb real well 26:27

    https://www.youtube.com/watch?v=AkCT4dNJN8s

  29. SoManyReptilainsEverywhere on Wed, 28th Apr 2021 9:23 pm 

    https://www.youtube.com/watch?v=aG1nWuYFkTM

    0:01 you see are tall she is. Rumors are that the top reptilian are 7 to 8 feet tall. Imagine that. I am 6,2 feet and people find me tall.

  30. SoManyReptilainsEverywhere on Wed, 28th Apr 2021 9:53 pm 

    You want more rumors. The earth is flat and below the earth it is the domain of reptilian. They even have dragon under there. I have no idea if it is true or not.

    https://www.youtube.com/watch?v=en1nbj_Q-6I

  31. SoManyReptilainsEverywhere on Wed, 28th Apr 2021 10:31 pm 

    There is one good thing about life, eventually you die of old age.

  32. SoManyReptilainsEverywhere on Wed, 28th Apr 2021 10:54 pm 

    I guess the devil is red. 6:00

    https://www.youtube.com/watch?v=PRIeJOdog0g

  33. MoreFakeSpaceBullshit on Wed, 28th Apr 2021 11:19 pm 

    Some more space lie, to keep human race from knowing the truth. More lies to keep us miserable and enslave to the bad reptilians.

    https://www.youtube.com/watch?v=RBxkRKZ34yo

    https://www.youtube.com/watch?v=K_JdHtxtUxc

  34. MoreFakeSpaceBullshi on Wed, 28th Apr 2021 11:26 pm 

    More lies to keep us miserable and enslave to the bad reptilians.

    https://www.youtube.com/watch?v=JLtZlWvre88

  35. MoreFakeSpaceBullshit on Wed, 28th Apr 2021 11:31 pm 

    Goto 0:10 you can see the water. good show boys. LOOOL

    https://www.youtube.com/watch?v=WHdkt9ncb9M

  36. MoreFakeSpaceBullshit on Wed, 28th Apr 2021 11:40 pm 

    Come on bad reptilian, do better real engineer are watching.

    https://www.youtube.com/watch?v=JOHp0YMdfa0

  37. MoreFakeSpaceBullshit on Wed, 28th Apr 2021 11:52 pm 

    Look at the top of tunnel between the whites stars, satanic symbol in red. Come on bad reptilian, stop putting satanist symbols everywhere. People will eventually figure out the real truth about planet earth: everything is fake.

    https://www.youtube.com/watch?v=Oj4w7i-TqsE

  38. MoreFakeSpaceBullshit on Thu, 29th Apr 2021 12:34 am 

    Look at the water flow. No way this engine wii light up with such a flow. 0:01

    https://www.youtube.com/watch?v=976LHTpnZkY

  39. Cloggie on Fri, 30th Apr 2021 8:06 am 

    Where would we be without Eindhoven, I’m asking you.

    The Guardian:

    https://www.youtube.com/watch?v=ZSxfuQAzOFs

    “EINDHOVEN – Europe’s first fully 3D-printed house gets its first tenants”

    https://www.ed.nl/video/eerste-huurder-3d-geprint-huis-krijgt-sleutel~p223360

    Project site:

    https://www.3dprintedhouse.nl/en/project-info/project-milestone/

    No need for wooden molds, just print, layer for layer.

    The thermal insulation is very good, thanks to hollow walls, filled with isolation material, rather than massive concrete or stone walls.

    https://www.3dprintedhouse.nl/image/2/1200/0/5/fff/uploads/media/nozzle-still002-1512066544-1512942841.jpg

  40. Cloggie on Fri, 30th Apr 2021 10:58 am 

    Guy from Vancouver discussing the Eindhoven printed home project:

    https://www.youtube.com/watch?v=AIxoREh_nxg

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